Daily Report 100915 2015-09-10
Macro Economy
Yesterday US stock market ended low; market downward trend was exacerbated after Apple rallying the day before. S&P 500 index closed down 27.37 point to 1942.04 point, down scope at 1.39%. On data perspective, US July JOLTS job vacancy was 5,753,000 and exceeded estimated 530,000, created record high; June value revised from 5,249,000 to 5,323,000. Recently most states are in monetary policies, RBNZ reduced official benchmark interest rate; Canada remains the same and UK will announce decision on interest rate; Fed will hold monetary policy meeting in next week and, under the current raising indeterminacy in international financial market, it is most likely countries will take more frequently easing policy.
In domestic, China's Premier Li Keqiang indicated in the Summer Davos in Dalian on 9 September, that China economy was hammered by the downward momentum but tendency was bullish; employment data proved economic operation was in rational section; government was capable to maintain economy medium to high growth; stabilize stock market was for preventing risk extending and now was about to say systematic financial risk has prevented. In addition, NBS will announce August inflation data intraday 9:30 AM, according to market anticipation, CPI will increase 1.8% on yearly basis and in July is 1.6% growth; PPI will decrease 5.6% on yearly basis and in July decreases 5.4%, pay attention on update data.
Stock Index
Yesterday stock market edged up; SW first grade industry all increased, construction material, computer soared over 4%. Excavation, automobile, electron, nonferrous metals, real estate raised over 3%. Futures discount almost returned, trading volume sharply decreased and price volatile jumped. Entire price was in low point at present, after the panicking sentiment, market gradually back to the mindset on exploiting value in low point. Such as stabilizing growth, state-owned enterprises reform, industrial capital frequently offered tender, substantial shareholders in listed company increased holdings. Overall institutions are in optimistic, Premier’s dialogue in Davos also boosted market confidence and, this had already showed in these days soaring. The period in bottom is usually long and hammer on upward side is enormous, price will not rally in a sudden. We recommend stay volatile and do not chase high.

Wednesday copper price fell after soared. LME spots premium was $16.75 and inventories increased at edged up 650 tons. Domestic spots discount was RMB 80 to RMB 20, trading activity had improved. On supply side, Chile Codelco was impacted from another strike from contract workers on Wednesday and was forced to shut concentrator from Chuquicamata temporally due to safety elements; Chuquicamata mine had 340,400 tons copper output in last year and total output from Codelco was 167,000 tons. The temporally shut concentrator was for milling of ores. Overall, does not exclude the possibility of copper price adjustment before Fed meeting in next week, yet the upward trend for copper price still exist.
Technically, LME bolster point was five-day moving average system $5250 and in domestic was RMB 40000.
Yesterday PP futures opened up high and went low, opened at 7680 and ended at 7630, trading volume increased 55364 lots to 741,000 lots; holding decreased 1766 lots to 237,000 lots. In upstream, FOB Korea propylene decreased $25 and average price was $665.5/ton. On spots side, yesterday domestic PP market loosed in stabilizing. Though PP futures opened high, regions as Sinopec central China, Petro China south China and north China reduced EXW, practitioners held bearish sentiment to future market. Merchants shipped to reduce warehouse; plants in downstream purchased as demand, entirety trading and investing within market were limited.
Intraday main quoted prices for wires of north, east and south markets are RMB 7850-8000/ton, RMB 8100-8250/ton and RMB 8000-8200/ton, respectively.
As for operation side, current moving average system was twined, price continued fluctuated for days; though the fallen oil price bearish PP market, there was lots equipment overhaul recently and bolstered domestic spots market. It was likely to continue consolidation in the near future. We recommend wait and see a clearly market.
                                                                       Dong LV (Investment Certificate NO. TZ008452)